🗓 Friday, December 5, 2025
► Europe higher – year-end rally expectations build ahead of Fed decision
European equities traded broadly higher as investors positioned for a potential “Santa rally” and a widely expected Fed rate cut next week. Stoxx 600 +0.35%, DAX +0.75%, CAC 40 +0.28%, FTSE 100 +0.07%, FTSE MIB +0.29%, IBEX 35 +0.12%, SMI +0.28%. Sentiment was supported by strong Wall Street tech momentum and resilient macro data, while euro zone GDP was revised up to +0.3% QoQ, easing growth worries slightly. Rate expectations remained key with markets still pricing an ~87% chance of a Fed cut on December 10. EUR/USD 1.165 (flat), GBP/USD 1.334 (+0.1%), EUR/JPY 180.7 (+0.1%).
► Wall Street set for new highs – AI & chip optimism meet dovish Fed bets
US futures pointed slightly higher as the S&P 500 continued its push toward fresh all-time highs, supported by Fed cut expectations and ongoing enthusiasm around AI. S&P 500 futures +0.30%, Nasdaq 100 +0.25%, Dow +0.05%. A December 10 rate cut is largely priced in, with traders looking to today’s delayed September PCE report for the Fed’s final inflation check before the meeting. Tech sentiment stayed broadly positive: Nvidia partner Hon Hai reported strong sales, while Chinese AI chipmaker Moore Threads surged over 400% in its Shanghai debut, reinforcing the global AI narrative. Netflix -2% premarket slipped after agreeing a $72B deal to buy key film and streaming assets from Warner Bros. Discovery. Treasuries remained under pressure (=higher yields), with US 10Y yields around 4.11% and on track for their worst week since June as supply, BoJ risks and potential 2026 inflation uncertainty kept the long end elevated.
► Asia mostly higher – AI and chip stories in focus; Japan pauses after strong run
Asia-Pacific markets were broadly firmer as regional indices tracked Wall Street’s strength and priced in next week’s likely Fed cut, though Japan saw some profit-taking. Kospi +1.78%, Shanghai +0.70%, Shenzhen +1.08%, HSI +0.58%, Taiwan +0.67%, Nifty +0.59%, ASX 200 +0.19%, while Nikkei -1.05% slipped after its recent surge to record territory. AI and semiconductor themes dominated: sentiment was boosted by Moore Threads’ explosive IPO performance and solid sales from Hon Hai, underscoring the continued investment boom around AI infrastructure. Chinese onshore markets outperformed after recent underperformance, with tech and growth names catching a bid.
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